Comments on: What I Learned Watching Bubbles: Better To Be Conservative Wrong

By: Free Money Finance

Free Money Finance — Fri, 07 Jul 2006 10:21:32 +0000

Star Money Articles for the Week of July 3

Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond: Consumerism Commentary discusses shopping at IKEA. AllFinancialMatters says that lots of money will make you smart. MightyBargainHunter suggests camping for a f…

By: Debt Free

Debt Free — Thu, 06 Jul 2006 23:59:41 +0000

Ah, but how many bought Amazon when it was around $7.00 in mid 2001 after the crash, then rode it up to $60 in late 2003? An even smaller number, I’d bet. If you did, were you the buy & hold type of investor or did you get out at that second peak? At today’s close of $36.80, you’ve lost about 40% since the $60 peak almost 3 years ago.

By: traineeinvestor

traineeinvestor — Wed, 05 Jul 2006 14:24:34 +0000

I’m not sure if I would characterise the recent surge in commodity prices and the more recent retreat as a bubble and the bursting of a bubble. Only history can really judge whether the surge in a broad range of commodity prices over a period of 2-3 years was a bubble or a cyclical move in prices largely driven by supply and demand factors that may have extended a bit too far. The answer may also depend on your definition of “bubble”. It is at least arguable that the upward price moves in a number of commodities (oil, gas, uranium and base metals in particular) were a simple case of rising demand and inelastic supply that was unable to meet the new demand. Most of these commodities are still a lot more expensive than they were when the upward price movements began.

Regardless, the point is a very good one. Joining a boom too late may be (and often is) worse than sitting on the sidelines. A number of people have made the point that avoiding or at least minimising losses is a characteristic of successful investors.